Overexposing kids to money problems is a bad idea

Victims of 'financial incest' often develop unhealthy relationship with money

Most financial planners say it's a good idea to talk to your
kids regularly about money. But you can go too far. If you're sharing too much information, or if
you're getting your kids directly involved your financial problems, you're probably
causing more harm than good.

"When children are
inappropriately exposed to adult financial problems and conflicts, they are
left feeling anxious and insecure," says financial psychologist Brad Klontz,
who wrote "Mind Over Money: Overcoming the Money Disorders That Threaten Our
Financial Health." "It can be very damaging."

Klontz says parents who regularly cross financial boundaries
with their children have a money disorder that he calls "financial incest."
Here are some signs you may have a problem:

You share all your financial worries with your
child, sparing no details. Afterward, you feel a sense of relief.

You use money to control
your children.

You use
your child as a go-between when you're arguing with your spouse or ex-spouse
about money issues.

You ask
your child to answer the phone when creditors call, or to lie about the
family's financial situation.

You ask
your teenager to help make important financial decisions, expect him or her to
balance the checkbook or to contribute to household bills.

Some therapists disagree with the "financial incest" label, noting
that it seems to be deliberately shocking and isn't universally recognized in
the field. "We psychologists use a set manual with
designated nomenclature so we can all be on the same page, and 'financial
incest' isn't in it," says Kathleen Gurney, a psychologist who
specializes in money-related issues in Sarasota, Fla.

Klontz responds that the term was not meant to be shocking: "Rather, like sexual incest or
emotional incest, it describes the dynamic of sacrificing the psychological
well-being of a child to meet adult needs, in this case, around money."

Although the label concerns her, Gurney says she has certainly
treated adults who have inappropriately involved their children in financial
issues, and children who experience anxiety as a result. It's especially common
in divorce, she says. One parent might
say, "Sorry, honey, but we can't get you braces because your dad is not paying
enough child support." The other might say, "Why don't you ask mom for that? I
certainly give her enough money every month."

"Parents use their children to work
out their emotional upsets," Gurney says.
"It's a mechanism for relieving their stress and pain, at least in the
short-term. But it can hurt the parent-child relationship for life and
certainly a child's chance of having a healthy relationship with money."

When children are
inappropriately exposed to adult financial problems and conflicts, they are
left feeling anxious and insecure.

-- Brad Klontz
Financial psychologist

The victims of financial incest can be adult children or younger
kids, Klontz says. When parents share too much information, at first the
children may feel honored or important because their parent is confiding in them.
But they usually end up anxious and confused because the problems are out of
their control. Often, Klontz says, they develop money disorders of their own as
a result.

Parents who use money as a tool to control their children can
cause even more psychological damage, therapists say. Gary Buffone, a Jacksonville, Fla., psychologist
who wrote "Choking on the Silver Spoon: Keeping Your Kids Healthy, Wealthy and
Wise in a Land of Plenty," says he has counseled couples who tried to use money
to force their grown children to attend a certain college or keep grandchildren
living nearby.

"I had one wealthy client who gave all three of his children
high-paying positions at his company," Buffone says. "To get their paychecks,
every Friday they had to show up at dinner. Otherwise, they didn't get paid. As
you can imagine, there was a lot of resentment and anger toward the father, and
the kids had a very twisted view of money."

Rand Conger, a psychology professor at the University of
California-Davis, said his research into the psychological impact of financial
stress on children shows that most cope very well with not having a lot of money
or material things. But they become very distressed "if their parents fight
with each other or with them about money issues," he says. "The most important
thing parents can do is keep calm and try to help children understand what is
happening."

In addition to keeping calm in times of financial crisis, Conger and
other therapists recommend the following steps:

If you find yourself tempted to share the
details of your financial problems with your kids, make a concerted effort to
find another outlet, whether it's a friend, a therapist or a nonprofit credit counseling agency.

Never give your kids money and ask them not to
tell others about it. Even comments like, "Here's $10, but don't tell your dad," can cause confusion and anxiety.

Don't keep kids in the dark, but don't give them
too much information either. Try to use conversations about family financial
issues to educate your child in age-appropriate ways about how money works and
the importance of living within your means.

In a crisis, give kids a way to help. It can
be as simple as telling a younger child to give Dad a big hug when he gets home,
or sitting down with older children and discussing ways you can all cut back
your spending. "Older children and adolescents will feel more empowered if they
feel they are helping," Conger says. "They can contribute by working outside
the home or providing more support at home so that parents can work more." That
kind of cooperation in a crisis, Conger says, will strengthen family ties and
give your children a strong financial foundation for the future.

Published: May 24, 2011

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